Under the prod of the Uniform Relocation Assistance Act, states have adopted statutes requiring that before filing eminent domain actions, condemnors must make an effort to acquire the desired properties by negotiating with the owners. But as in the case of most of eminent domain laws ostensibly intended to protect the rights of condemnees, courts have been generally lukewarm about enforcing this law (except, perhaps, in Illinois). Typically, any sort of perfunctory “offer” by the condemnor is deemed by courts to be in compliance with the statutory requirements. Now, we get a ray of light from New Jersey, in the form of an Appellate Division case captioned New United Corporation v. Essex County Vocational-Technical Schools Board, No. A-2014-110T2 and A-2302-10Ts, opinion filed on April 1, 2012.
This was an effort to by the Board to take a condominium unit, for which the Board offered $4,850,000. The owners responded with two letters from their lawyer, pointing out that the offer was based on a deficient appraisal, and that it disregarded a number of the property’s features. They made no counteroffer because they needed additional information from the Board concerning the taking and the basis for its offer. They did mention a value of $26,000,000. The Board responded by ignoring the letters and filing an eminent domain action. After the trial court upheld the right to take, notwithstanding the owners’ argument that they never received a proper offer that complied with the New Jersey statute, the owners appealed. Held: reversed and remanded with directions to dismiss the condemnation action without prejudice and to do it right, should the Board decide to try again.
What makes this opinion remarkable is the court’s tone and its extensive collection of case law holding that in eminent domain cases, the coondemnor must meet a high standard of fairness in the treatment of condemnees. Check out the opinion on this point. So what, you say. Eminent domain cases often ccontain lofty judicial rhetoric about fairness and justice and other good stuff, which they then fail to apply to the facts before the court. But not here. Said the court:
We are convinced that the Board of Education failed to fulfill its statutory duty to negotiate in good faith. We appreciate that it was faced with an adversary that was actively challenging its very right to exercise the power of eminent domain. However, the record only reveals New United’s overarching insistence that it be paid just compensation, and that it would be satisfied once that occurred. New United never expressed a stubborn reluctance to hold onto its condominium unit at all costs. If that were the case, or even something approaching such adamancy, we would agree that any negotiations regarding price would have been futile. However, New United expressly identified what it viewed as the errors and omissions of the appraiser’s opinion of value, which needed to be addressed, or at least acknowledged, before the eminent domain action was filed. We will not speculate on what would have been the outcome if the Board of Education had responded to New United’s letters. The Board of Education cannot fulfill its statutory responsibility to engage in bona fide negotiations by burying its head in the sand. Willful blindness does not satisfy the square corners doctrine.